"It definitely is a major milestone in the mobility paradigm for India and perhaps the world," Society of Indian Automobile Manufacturers (SIAM) Director General Dilip Chenoy told PTI, adding it has the potential to create a new segment of customers in the existing market.

According to market research firm Crisil, Nano's price reduces the cost of ownership of an entry-level car by 30 per cent and to below three times the cost of owning a motorcycle.

"This will make the car affordable to an additional 14 million families, including a section of 58 million two-wheeler owners," Crisil said.

General Motors India Vice-President P Balendran said: "While the Nano will not affect the other compact cars in the market, it will create a new segment of buyers, mainly those who want to upgrade from two-wheelers to four wheeler."

Nano can help expand the car market and help the existing players in future when its owners eventually decide to upgrade, Balendran said, adding that Nano can have an impact on the used car market as customers will prefer a brand new car for the same price of an old car.

The success of Nano, will, however, depend on how far Tata Motors [Get Quote] is able to meet customer expectations and acceptance in terms of  cost of ownership, quality and maintenance, Chenoy said.

"A lot will depend on cost of ownership and acceptance," he said. Crisil Research Head Sachin Mathur said Nano launch has further highlighted India's capabilities as a low cost manufacturing hub and it would further encourage continued emphasis on product developments in low cost cars in the country by other manufacturers.